War in Iran hits Asian supply chains: Korean cosmetics, medical supplies, garbage bags at risk - WP

Across Asia, relatively far from the Middle East war, companies and consumers are facing or preparing for shortages of everyday goods. At the heart of the supply chain problems, in addition to soaring oil prices, is a shortage of key petrochemicals used in almost every product: snacks, ramen, bottled water, Korean cosmetics, school uniforms, rubber gloves, garbage bags.

The Washington Post reports.

Iran's virtual closure of the Strait of Hormuz has shaken many Asian economies and led to a rise in the cost of raw materials. Especially oil, which is vital for the production of chemicals such as ethylene and propylene, which are used to make everyday goods, including plastic bottles, food packaging, car parts, rubber and more. Last year, up to 70% of Asia's oil passed through the Strait of Hormuz.

Countries such as Japan, Thailand, South Korea and Sri Lanka have already taken measures to control oil prices to cushion the blow for consumers or have asked workers to change their work schedules to save fuel. Three South Korean airlines have now entered emergency management mode to cope with high jet fuel costs.

What are the effects already being seen in Asian countries

In Malaysia, the rubber glove industry is facing rising costs due to a shortage of a petroleum product used to make personal protective equipment.

In Japan, snack maker Yamayoshi Seika suspended production of six products last month, including its popular Wasabeef chips, due to difficulties in purchasing fuel oil for its equipment. The company later resumed production but warned that supplies could be lower for some time.

At a school uniform factory in Miyazaki Prefecture in southern Japan, the cost of cutting fabric is already rising. The company uses polyethylene sheets made from petroleum to hold the fabric in place so it can be cut into pieces for school uniforms.

In Indonesia, bottled water producers are planning to cut costs to cope with rising raw material prices. And in Singapore and Taiwan, companies are finding it more expensive to produce medical products such as syringes and catheters, which are mostly made from petroleum products.

In South Korea, the government has introduced a 12-point energy-saving plan that recommends taking shorter showers and charging phones and electric cars throughout the day.

Shoppers are also panic-buying government-regulated garbage bags, fearing that oil shortages could lead to shortages of these and other plastic goods. Some stores are limiting the number of bags sold to each customer to prevent stockpiling.

Even South Korea's Economy Minister Kim Sung-hwan has weighed in: "There's no need to worry about the supply of standard garbage bags. You'll never be in a situation where you have to hoard garbage at home."

The supply chain disruptions have hit the country's plastics producers, including those that make instant noodle packaging and plastic containers for K-beauty products. Cosmetic packaging companies have already warned that prices for most products "will inevitably rise" due to uncertain raw material supplies and rising costs.

However, one Asian country has been less affected: China. Many analysts expect China to emerge from the crisis relatively unscathed compared to most of its neighbors, in part because Beijing is looking to russia as an alternative oil supplier. China's abundant electricity grid relies on coal and renewable energy, rather than oil and LNG, as in many other Asian countries.

Meanwhile, in Taiwan, prices for Ya Ju, a plastic products store, have doubled or tripled in the past two weeks. The company is now covering its costs but is warning customers that supplies are limited.

The supply problems have made many plastic companies cautious about accepting orders for April, said a manufacturer who spoke on condition of anonymity. Adding to the uncertainty, suppliers have not provided price quotes for April, possibly because they do not know exactly what they can supply and at what price, the source said.

"If there is no raw material, we cannot produce anything," the producer said.

As Ukrainian News Agency earlier reported, the European Union is developing emergency steps to contain the consequences of the energy crisis, which has worsened amid the war around Iran. Brussels is already preparing an action plan in case the situation worsens further.

Meanwhile, Iran has handed over a list of ten demands to the US and Israel to end the war. Key conditions include the complete lifting of sanctions and a halt to strikes on Hezbollah.

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